China has threatened severe economic retaliation against Japan if Tokyo further restricts sales and servicing of chipmaking equipment to Chinese firms.
Industry observers believe this will further complicate US-led efforts to cut the world’s second-largest economy off from advanced semiconductor technology.
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Toyota Motor Corp. privately told officials in Tokyo that Beijing could react to new semiconductor controls by cutting Japan’s access to critical minerals that are essential for automotive production.
“We are deeply concerned about the harm being done to US companies and US leadership in semiconductor innovation by unilateral export controls with questionable national security benefits,” wrote Representative Zoe Lofgren and Senator Alex Padilla, both California Democrats, in a 13 August letter to senior Commerce Department officials. They are “even more troubled” by the possibility of another round of unilateral controls.
Toyota is an important and influential company in Japan and has invested in a new chip campus being built by Taiwan Semiconductor Manufacturing Co. in Kumamoto to further its semiconductor efforts.
The automotive company is deeply involved in the country’s chip policy.
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By GlobalDataPressure has also been applied from the US to Japan to impose additional restrictions on the ability of firms including Tokyo Electron to sell advanced chipmaking tools to China.
This is part of a long-term plan to curtail China’s semiconductor progress, according to sources and senior US officials are working with their Japanese counterparts on a strategy to ensure adequate supplies of critical minerals continue.
China imposed its own restrictions on the exports of gallium, germanium and graphite last year.
South Korea’s trade minister, Cheong Inkyo, said the US should offer incentives and more flexibility to encourage allies to collaborate on China chip controls.
“For countries or companies trying to comply with the US in good faith, there should be some kind of carrots,” Cheong said in his first interview with media since he took office in January.
“That would help US policy be embraced more easily,” he added.
